'They came, they saw, they drove us out of our homes.' That's what some French would say of expat home-owners, especially in regions where the Brits have landed in large numbers. But here's why it's not (entirely) our fault that French home prices have climbed so spectacularly.

“Vineyards, sunshine, food and walks. Lots of long walks,” Londoner Molly Smith explains the allure of la belle France.

Smith bought her first French retreat in the popular Dordogne region three years ago. Like 100,000 other Brits, she spends her summer months in 'Dordogneshire'—where Cheddar and Stilton feature on market stalls and pubs and cricket clubs are increasingly becoming part of everyday life.

Dordogneshire: apparently there are very few Brits who don't want to live here

Slick British advertising campaigns have helped attract hoards of Britons to regions like the Dordogne. “Newspaper supplements, television programmes and even adverts on the London underground just added to that feeling that I had to find a way get away from it all,” Mrs Smith reminisces. For the British, France is synonymous with sunshine and holidays.

But across the channel, that warm sunny feeling is not always reciprocated.

Amid growing alarm over an Anglo-invasion, Brits face accusations of pushing up prices and crowding out locals. In Brittany, where anti-English feeling has been reported as being particularly intense, graffiti urging "Brits out, stop speculation" was earlier this year daubed on the offices of a notary who handles house purchases for UK buyers. The British press was quick to dub the town where the incident occurred, Bourbriac, as the 'village of hate'.

In the Celtic coastal region, locals claim British buyers have pushed up house prices by as much as 50 per cent over the past few years.

Michel Guine is 75 and has lived in Brittany all of his life: “My son cannot afford to buy a home in this village,” he says. “British buyers all seem to be after homes near La Rochelle but it is the local families who are paying the price.”

But it's not just in Brittany where French house-hunters would like to find a scapegoat for skyrocketing prices.

Prices: Up, up and away

There is no doubt that house prices in France have soared. Over the past twenty years the average rate of growth in prices across France has stuck around five percent.

Traditionally, this has been the growth rate that the French government has favoured to maintain a stable housing market. But during recent years, annual growth has exceeded this figure and in 2004 France experienced growth of more than 15 percent, followed by 10.9 percent in 2005.

This year analysts predict growth of between 9–11 percent and French estate agents are on record as saying there is no habitable rural building left to buy for less than EUR 100,000.

Statistics like these only add to fears that the locals are being forced to spend more.

“But British people are not to blame for the state of affairs,” Claudia Carrier-Hein, estate agent for Demeures et Propriétés du Sud Ouest insists. She has been selling houses in the Dordogne for ten years and is categorical.

She adds: "British people are not stupid, they do not buy over priced houses. When I began working as an estate agent I was told Brits suffer 'coup de coeurs,' that they fall in love with properties and pay any price — but that is simply not the case."

In fact, British families have specialised in finding, and then remodelling, run-down buildings.

“British people have always tended to buy old ruins that no one wanted and they have added real value to them. It is not the case that a whole market shift can be attributed to Brits who pay above the odds for homes over here, ” said Carrier-Hein.

Other varieties of expat buyers have arrived in much smaller numbers but, according to estate agents, are actually more likely to overbid for a property.

“The big price properties are not actually being bought by the English,” Jean-Alain Corfa of Kermorvan Immobiliers in Brittany adds. “It is actually other nationalities who go for the top end of the market. I have many Swiss, Dutch, Japanese and American clients.”

The boom factors

The housing boom that started in the 1990s—and which has only slowed but not stopped even today—is of course, not limited to France. Never before have so many countries experienced housing market ramp-ups at the same time. The International Monetary Fund (IMF) say the strength, duration and ubiquity of the global boom is underpinned primarily by low interest rates.

So while the French may find it convenient to point the finger across the channel, there is no concealing that domestic factors have also played a significant part in the Hexagon's rising prices. Loss of confidence in a deflated stock market, stable interest rates and government-run programmes such as the 'leaseback scheme' have also attracted larger numbers of French buyers into the market.

An example of a renovation project on sale from Heart of France in the Limousin

“The demand to buy houses within France itself remains strong. France has, over the past 20 years, become far more aware of the investment offered by home ownership and is now much more allied to the UK and Irish belief in the value of owning such assets,” managing director of Vivre en France, Trisha Mason explains.

“And the French government has encouraged investment in property with various schemes of which the leaseback is one.”

Leaseback properties were introduced to increase the quantity of holiday accommodation in areas capable of attracting more tourists.

“The leaseback system is a scheme unique to France which enables you to afford your dream home and cover a lot or all of the mortgage repayments,” Miranda John, international mortgage broker at Blevins Frank says. 

“You will receive a guaranteed rental income, averaging between three and 6 percent, from a large holiday company who will rent out your property for 9 years, sometimes more. The other main advantage of this scheme is that when you originally buy your property, you don't have to pay VAT which represents a 19.6 percent saving.”

Granted, government promises of capital gain do much to increase France’s allure to international clients as well.

And there is no question that if British and other expat buyers have not single-handedly created a speculative housing market in France, they are still participating in a broader market phenomenon.

Brits, for example, have been drawn by the increased accessibility offered by low-cost airlines and airports in Nîmes, Carcassonne and Toulouse have had an immediate impact on house prices in the area.

“Our market report for 2006 points to a 21 percent increase in property prices close to low-cost airports,” Trisha Mason of Vivre en France says.

 

The upside to paying more

But as further evidence that the Brits are price-sensitive, British buying patterns are already starting to change. Astute Britons are attempting to tap previously untouched areas.

“I would advise clients to look at Limousin, Auvergne and Burgundy in central France. Much of Limousin has become overpriced in our opinion since 2003 but there are still pockets which have been largely undiscovered by the foreign buyer, and which are too remote from work for the French, where bargains are still to be found,” Mason advises.

The British love affair with France has not had only negative economic consequences, as tax officials in the Dordogne—which now runs English-language tax seminars—can attest.

“The French want tourists but they do not want any of the inevitable consequences,” Carrier-Hein, estate agent for Demeures et Propriétés du Sud Ouest argues.

“UK buyers have propped up the local economy in rural areas of France. Brits tend to buy old properties and renovate them and that means using local French builders and architects. Britons are good for France’s rural economy. France cannot have its cake and eat it.”

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Daisy Ayliffe started her career at BBC Westminster in 2002, an experience that whetted her appetite for a career in political journalism. She has reported and produced for a local BBC radio station, BBC Surrey, and covered politics for the Westminster news site, epolitix.com, as well as written for the Whitehall & Westminster World newspaper. As of summer 2005, she covers EU affairs for the EUpolitix.com website and Parliament Magazine.

May 2006

Copyright Expatica

Subject: Living in France, French property, housing prices, French housing market, Dordogne, housing speculation, housing market trends